BANKING OMBUDSMAN

PRESENTED BY

G.BALAJI
A.RAGAVENDRAN
 Banking Ombudsman Scheme
 The Banking Ombudsman Scheme enables an
expeditious and inexpensive forum to bank
customers for resolution of complaints relating
to certain services rendered by banks.
 The Banking Ombudsman Scheme is
introduced under Section 35 A of the Banking
Regulation Act, 1949 by RBI with effect from
1995.
Who is a Banking Ombudsman?
 The Banking Ombudsman is a senior official
appointed by the Reserve Bank of India to
redress customer complaints against deficiency
in certain banking services.
How many Banking Ombudsmen
have been appointed and where
are they located?
 As on date, fifteen Banking Ombudsmen
have been appointed with their offices located
mostly in state capitals. The addresses and
contact details of the Banking Ombudsman
offices have been provided in the annex.
 Which are the banks covered
under the Banking Ombudsman
Scheme, 2006?

 All Scheduled Commercial Banks, Regional

Rural Banks and Scheduled Primary Co-
operative Banks are covered under the
Scheme.
 What are the grounds of
complaints?
 Non-payment or inordinate delay in the payment or
collection of cheques, drafts, bills etc.;
 Non-acceptance, without sufficient cause, of small
denomination notes tendered for any purpose, and for
charging of commission in respect thereof;
 Non-acceptance, without sufficient cause, of coins
tendered and for charging of commission in respect
thereof;
 Non-payment or delay in payment of inward
remittances ;
 Cont……….,
 Failure to issue or delay in issue of drafts, pay orders
or bankers’ cheques;
 Non-adherence to prescribed working hours ;
 Failure to provide or delay in providing a banking
facility (other than loans and advances) promised in
writing by a bank or its direct selling agents;
 Delays, non-credit of proceeds to parties accounts,
non-payment of deposit or non-observance of the
Reserve Bank directives, if any, applicable to rate of
interest on deposits in any savings,current or other
account maintained with a bank ;
 Cont……….,
 Complaints from Non-Resident Indians having
accounts in India in relation to their remittances from
abroad, deposits and other bank-related matters;
 Refusal to open deposit accounts without any valid
reason for refusal;
 Levying of charges without adequate prior notice to
the customer;
 Non-adherence by the bank or its subsidiaries to the
instructions of Reserve Bank on ATM/Debit card
operations or credit card operations;
 Cont……….,
 Non-disbursement or delay in disbursement of pension (to
the extent the grievance can be attributed to the action on
the part of the bank concerned, but not with regard to its
employees);
 Refusal to accept or delay in accepting payment towards
taxes, as required by Reserve Bank/Government;
 Refusal to issue or delay in issuing, or failure to service or
delay in servicing or redemption of Government
securities;
 Forced closure of deposit accounts without due notice or
without sufficient reason;
 Cont……….,
 Refusal to close or delay in closing the accounts;
 Non-adherence to the fair practices code as adopted by the
bank or non-adherence to the provisions of the Code of
Bank s Commitments to Customers issued by Banking
Codes and Standards Board of India and as adopted by the
bank ;
 Non-observance of Reserve Bank guidelines on
engagement of recovery agents by banks;
 And any other matter relating to the violation of the
directives issued by the Reserve Bank in relation to
banking or other services.
Deficiency in service with respect
to loans and advances
 Non-observance of Reserve Bank Directives
on interest rates;
 Delays in sanction, disbursement or non-
observance of prescribed time schedule for
disposal of loan applications;
 Non-acceptance of application for loans
without furnishing valid reasons to the
applicant; and
 Cont……….,
 Non-adherence to the provisions of the fair
practices code for lenders as adopted by the bank
or Code of Bank’s Commitment to Customers, as
the case may be;
 Non-observance of any other direction or
instruction of the Reserve Bank as may be
specified by the Reserve Bank for this purpose
from time to time.
 The Banking Ombudsman may also deal with such
other matter as may be specified by the Reserve
Bank from time to time.
 When can one file a complaint?
 One can file a complaint before the Banking
Ombudsman, if the reply is not received from
the bank within a period of one month after the
bank concerned has received one s
representation, or the bank rejects the
complaint, or if the complainant is not satisfied
with the reply given by the bank.
 When will one s complaint not be
considered by the Ombudsman ?
 a. One has not approached his bank for redressal of his
grievance first.
 b. One has not made the complaint within one year
from the date one has received the reply of the bank or
if no reply is received if it is more than one year and
one month from the date of representation to the bank.
 c. The subject matter of the complaint is pending for
disposal / has already been dealt with at any other
forum like court of law, consumer court etc.
 Cont………….,
 d. Frivolous or vexatious
 e. The institution complained against is not
covered under the scheme.
 f. The subject matter of the complaint is not
within the ambit of the Banking Ombudsman.
 g. If the complaint is for the same subject matter
that was settled through the office of the
Banking Ombudsman in any previous
proceedings.
 What is the procedure for filing
the complaint before the Banking
Ombudsman?

 One can file a complaint with the Banking

Ombudsman simply by writing on a plain
paper. One can also file it through online or by
sending an email to the Banking Ombudsman.
 Where can one lodge his/her
complaint?
 One may lodge his/ her complaint at the office
of the Banking Ombudsman under whose
jurisdiction, the bank branch complained against
is situated.
 For complaints relating to credit cards and other
types of services with centralized operations,
complaints may be filed before the Banking
Ombudsman within whose territorial jurisdiction
the billing address of the customer is located.
Can a complaint be filed by one s
authorized representative?

 Yes. The complainant can be filed

by one s authorized representative
(other than an advocate)
 Is there any cost involved in
filing complaints with Banking
Ombudsman

 No. The Banking Ombudsman

does not charge any fee for filing
and resolving customers’
complaints.
 Is there any limit on the amount
of compensation as specified in
an award?
 The amount, if any, to be paid by the bank to
the complainant by way of compensation for
any loss suffered by the complainant is limited
to the amount arising directly out of the act or
omission of the bank or Rs 10 lakhs,
whichever is lower.
Can compensation be claimed for
mental agony and harassment?
 The Banking Ombudsman may award
compensation not exceeding Rs 1 lakh to the
complainant only in the case of complaints relating
to credit card operations for mental agony and
harassment.
 The Banking Ombudsman will take into account
the loss of the complainant s time, expenses
incurred by the complainant, harassment and
mental anguish suffered by the complainant while
passing such award.
 What details are required in the
application?
 Name and address of the complainant,
 Name and address of the branch or office of the bank
against which the complaint is made,
 Complaint supported by documents, if any,
 The nature and extent of the loss caused to the
complainant,
 The relief sought from the Banking Ombudsman and a
declaration about the compliance of conditions which
are required to be complied with by the complainant.
 What happens after a complaint is
received by the Banking
Ombudsman?
The Banking Ombudsman endeavours to promote,
through conciliation or mediation, a settlement of the
complaint by agreement between the complaint and
the bank named in the complaint.
If the terms of settlement (offered by the bank) are
acceptable to one in full and final settlement of one s
complaint, the Banking Ombudsman will pass an
order as per the terms of settlement which becomes
binding on the bank and the complainant.
Can the Banking Ombudsman reject
a complaint at any stage?
 Yes. The Banking Ombudsman may reject a
complaint when
 Not on the grounds of complaint referred,
 Compensation sought from the Banking
Ombudsman is beyond Rs 10 lakh .
 Requires consideration of elaborate documentary
and oral evidence and the proceedings before the
Banking Ombudsman are not appropriate for
adjudication of such complaint
 Con…
 Without any sufficient cause
 That it is not pursued by the complainant with
reasonable diligence
 In the opinion of the Banking Ombudsman
there is no loss or damage or inconvenience
caused to the complainant.
What happens if the complaint is
not settled by agreement?
 If a complaint is not settled by an agreement
within a period of one month, the Banking
Ombudsman proceeds further to pass an award.
Before passing an award, the Banking
Ombudsman provides reasonable opportunity to
the complainant and the bank, to present their
case.
It is up to the complainant to accept the award in
full and final settlement of complaint or to reject
it.
 Is there any further recourse
available if one rejects the Banking
Ombudsman’s decision?
 If one is not satisfied with the decision passed by the
Banking Ombudsman, one can approach the appellate
authority against the Banking Ombudsmen’s
decision. Appellate Authority is vested with a Deputy
Governor of the RBI.
 One can also explore any other recourse and/or
remedies available to him/her as per the law.
The bank also has the option to file an appeal before
the appellate authority under the scheme.
 Is there any time limit for filing
an appeal?
 If one is aggrieved by the decision, one may,
within 30 days of the date of receipt of the
award, appeal against the award before the
appellate authority. The appellate authority
may, if he/ she is satisfied that the applicant
had sufficient cause for not making an
application for appeal within time, also allow a
further period not exceeding 30 days.
How does the appellate authority
deal with the appeal?
 The appellate authority may
i. dismiss the appeal; or
ii. allow the appeal and set aside the award; or
iii. send the matter to the Banking Ombudsman for
fresh disposal in accordance with such directions as
the appellate authority may consider necessary or
proper; or
iv. modify the award and pass such directions as may
be necessary to give effect to the modified award; or
v. pass any other order as it may deem fit.